Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Government’s Brief Asks Court to Treat Reverse-Payment Agreements as Presumptively Unlawful Under “Quick Look” Analysis, (Jan 24, 2013)

By Jeffrey May, J.D.

Reverse-payment agreements between brand name pharmaceutical companies and generic rivals should be treated as presumptively unlawful under a “quick look” rule of reason analysis because they closely resemble the sorts of horizontal agreements to suppress competition that have previously been condemned under the antitrust laws, the government contends in a brief filed with the U.S. Supreme Court on January 22 in an FTC case to be heard by the Court in March. The Court, in December, granted the FTC’s petition for review of a decision of the U.S. Court of Appeals in Atlanta (677 F.3d 1298, 2012-1 Trade Cases ¶77,865) affirming dismissal of an FTC action challenging patent litigation settlements concerning testosterone-replacement drug AndroGel (FTC v. Watson Pharmaceuticals, Inc., Dkt. 12-416).

In its 131-page (including appendix) brief, the government also argues that the “quick look” approach is superior to the other modes of analysis, including the “scope-of-the-patent” approach applied by the Eleventh Circuit. The appellate court held that, “absent sham litigation or fraud in obtaining the patent, a reverse payment settlement is immune from antitrust attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent.” According to the FTC, the underlying patent had no exclusionary potential because the brand name drug company was “not likely to prevail” in the underlying infringement action against the generic drug companies. However, the appellate court did not want to decide what the likely outcome of settled patent infringement claims would have been. In addition, the government asserts in its brief that the FTC’s complaint states a claim for relief under the “quick look” approach.

Attorneys: Jeffrey I. Weinberger (Munger, Tolles & Olson LLP) for respondent. Donald B. Verrilli, Jr., Solicitor General, for petitioner.

News: Antitrust ConsumerProtection FederalTradeCommissionNews